1. Overview

The spring meetings of the World Bank and IMF are about to start in Washington, DC. They come on the heels of the G20 summit in London which decided to strengthen the IFIs, particularly the IMF, in order to combat the financial and economic crises (see Bretton Woods Project analysis of the summit). These meetings will be the first opportunity for the IFIs to take action on the G20 promises and try to capitalise on the new resources being put into them. They will also be the first chance for the vagueness in the G20 communique to be made clear. As always the Bretton Woods Project is following the action and bringing you the highlights, important details, and in-depth analysis.

2. G20 and the financial crisis

The outcomes of the London Summit and their revelevance to IFIs will be an important agenda item (see Update 65). Sessions will discuss the IMFs crisis response in light of its boost in resources.

The UN commision on financial reform has been very critical of the IMF approach so far (see here). This has largely been because of ths IMF’s continued heavy handed use of conditionality (see here), which many view as overly contractionary especially given the loose fiscal and monetary policy being employed to counteract the crisis in rich countries. The IMF may have a lot of new resources , but there is concern it is not changing policy fast enough(see here). While the Fund has highlighted its changes to structural conditionality, they are not enough. New conditionality-free facilities for middle-income countries are a step in the right direction, but not enough countries will be eligible.

On the world Bank side, the G20 was quite vague about how and by how much the Bank will see a boost in resources and lending. It demanded a speeding up of governance reform but rich countries are still resisting deep changes (see here). The big G20 omission was concrete commitments to put money in the World Bank’s Vulnerability Financing Facility, the proposed instrument for rich countries to use part of their fiscal stimulus for poor countries (see here). The question is open as to whether any country besides Britain will announce contributions to the VFF during the spring meetings. If not, that will make the World Bank look quite marginalised compared to the role and money being given to the IMF.

5. Highlights of official meetings

Below we bring the highlights from the communiqués at the spring meetings, including the G24, G7, IMFC and Development Committee. You can find detailed coverage of all communiqués in our dedicated article.

24 April

G24 communiqué: The G24 welcomed what was agreed at the G20 in London in early April but threw in a few twists. It specifically referenced the UN as a venue for discussion, which has been avoided by rich countries, and also obliquely called for consideration of China’s proposal to end the use of the US dollar as the world’s reserve currency. On the G20 agreements, it asked for further changes: a system for ex-post reallocation of SDRs, a more flexible FCL-style lending facility for low-income countries, and for donors to put money into the Bank’s Vulnerability Financing Facility and an early top-up of IDA. See the full analysis.

G7 communiqué: If you have read the G20 London Summit communiqué then you really don’t need to bother to look at the G7 communiqué. The group of 7 of the richest economies’ are all members of the G20, and their communiqué shows just how little progress has been made since the 2 April G20 meeting. Many of the agreements of that meeting are reiterated, but there is already evidence of some backsliding. See the full analysis.

25 April

IMFC communiqué: The IMFC, the direction-setting body for the IMF, as expected welcomed the G20 commitments on IMF resources, lending reviews, and other elements. It threw in a call for a quick conclusion to the Doha trade round despite no such mention in G7 or G24 communiqués. It reflected developing country demands that the temporary borrowing arrangements which are boosting the IMF’s resources be converted into permanent increases through a general quota increase. On governance questions is supported the January 2011 date for the conclusion of the next quota review, and demanded a prompt start to work on the quota formula. It was unable to say much else on governance because the IMF executive board has not yet considered the Manuel committee report on IMF corporate governance and the reshaping of decision-making bodies. See the full analysis.

26 April

Development Committee communiqué: In keeping with the overall ‘no progress’ theme of this year’s spring meetings, the World Bank’s development committee issued a two page communiqué which had little to add to the agreements made at the April G20 summit. See the full analysis.

The Bretton Woods Project is a UK-based NGO that challenges the World Bank and IMF and promotes alternative approaches. We serve as an information provider, watchdog, networker and advocate. Our flagship publications are the Bretton Woods Observer, a quarterly critical review of developments at the World Bank and IMF, and the Bretton Woods Bulletin, an online update of news and action on the institutions.